Which of the Following Is NOT a Drawback of a Revenue-Sharing

question 49

Multiple Choice

Which of the following is NOT a drawback of a revenue-sharing contract?

• A)The supplier carries a greater burden of the risk.
• B)The supplier may not be motivated to expand its capacity for fear of ending up with excess capacity if demand remains weak.
• C)The supplier has the administrative burden of monitoring the manufacturer's sales and revenues to be sure the firm isn't underreporting them.
• D)The burden of overcapacity is borne by the buyer.

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